Industrial action threatened as steel plant is mothballed

The threat of industrial action by steelworkers has been raised after confirmation that a giant factory is to be mothballed within days, with the loss of 1,600 jobs.

Workers were told that the Teesside Cast Products Plant (TCP) in Redcar will start to be mothballed on Friday, dashing hopes of a reprieve. The plant was due to close last month but owners Corus announced it would carry on working for some more weeks while raw materials were used up.

Tata, the Indian firm which owns Corus, confirmed the mothballing today, repeating it was as a direct result of the "illegal withdrawal" of business last April by a group of four companies representing almost 80 per cent of the plant's sales.

"It has not been possible to secure sufficient short-term sales of slab so as to enable TCP to operate at other than a cash loss. The timing of the mothballing is dependent on the consumption of the remaining iron ore stockpiles and is expected to take place later this week.

"The assets belonging to TCP that will remain in operation will make the Tata Steel Group self sufficient in coke and will open up the potential for third-party sales. The viability of this coke-making operation is dependent on continuing attractive market conditions," said a Tata statement.

The Community union, which represents steelworkers, said the decision was "premature" and "jeopardised" the foundations of British manufacturing.

General secretary Michael Leahy said the move would "devastate" the North East, adding: "The decision to mothball disregards the potential for renewal and ignores alternatives which would safeguard the future of Teesside, the steel industry and British manufacturing.

"We still believe a viable deal can be done with a potential buyer. The slab market is improving week by week and we are firmly of the view that Tata Corus have acted too quickly.

"By putting profit before the people of Teesside, Tata Corus have undermined the foundation for future growth. We will continue to fight for a future for Teesside. Lots of questions remain unanswered, not least the length of time that the mothball will take place.

"In view of the manner in which this has been done, with Tata Corus riding roughshod over any consultation, it means we cannot rule out seeking our members' support for industrial action."

There were rumours locally that Business Secretary Lord Mandelson was planning to visit the factory on Thursday following a meeting of the Cabinet in the North East.

Local Labour MP Vera Baird said the rising price of steel could give the town's major employer a future, and she hoped it could swiftly reopen if a buyer was found.

"There are credible people interested in taking this plant on to give it the future it deserves and Corus have agreed to keep the blast furnace 'like a baby' so that it can come back to work again quickly.

"The steel slab price is going up and if this mothballing step has to be taken we need to keep our skilled people in place for the new day which may dawn soon.

“The Government has said throughout that if there is a future as a going concern, we will support TCP in the interim. We now have to get some real focus into how that can apply."

Workers were told that Friday would be the last day of steel production.